Northrop Grumman Beats Boeing for $3.8B KC-10/KDC-10 Logistics Support Contract
Northrop Grumman has beaten out incumbent contractor Boeing to snag the 10-year, $3.8 billion contract for KC-10/KDC-10 [PDF] aerial tanker logistics support. Under the contract, Northrop Grumman’s team will provide depot-level maintenance and modifications, supply chain management, and other support tasks for 59 KC-10 Extenders, USAF Air Mobility Command tanker/cargo planes that have played a role in anti-terrorist and humanitarian operations. The contract also covers aerial refueling system support for the KDC-10, which is the Royal Netherlands Air Force’s version of the aircraft.
Boeing recently received a $102.3 million “bridge” contract to cover the hand over of work to a new contractor should Boeing not win the new 10-year contract. Looks like Boeing will be crossing that bridge.
Northrop Grumman Technical Services division has a set up a team of 4 companies to execute this contract – but Boeing is reviewing its options, even as it positions itself for a related modernization contract.
Northrop Grumman’s team includes:
- TIMCO Aviation Services – a provider of aviation maintenance, repair and overhaul services for commercial and government aircraft operators in North America. TIMCO has experience maintaining, repairing, and modifying DC-10 aircraft.
- AAR – an aviation supply chain management company. AAR provides supply chain management support for the USAF Joint STARS Program and the United Kingdom E-3D Whole Life Support Program.
- Chromalloy – an engine maintenance firm, which worked on USAF T-39 program.
- MTU Maintenance – an operator of a CF6-50 engine overhaul facility, including work on the USAF E-4B program.
The KC-10/KDC-10 contractor logistics support (CLS) program provides:
- Depot maintenance and modifications
- Contractor operated and maintained base supply
- Supply chain management
- Ground support equipment maintenance
- Engine management
- Foreign Military Sales support (Eindhoven Air Base, The Netherlands)
- Sustainment engineering
Under the terms of the new logistics support contract, Northrop Grumman will take over supply chain management, depot-level logistics integration and support, engine maintenance, aircraft maintenance and modifications at Northrop Grumman’s Lake Charles Maintenance and Modification Center in Lake Charles, LA. TIMCO Aviation Services’ facility in Greensboro, NC will also play a role in the program.
Note that updates do not include individual awards within the overall contract.
Oct 2/09: The Lexington Institute’s Loren Thompson writes “Boeing Defeat Points To Problems In Air Force Relationship“. He believes that the KC-10 loss:
“…suggests that Boeing’s relationship with its biggest customer – the Air Force – is in bad shape. Over the last two years, the Air Force has selected Northrop over Boeing to provide a next-generation tanker; supported termination of Boeing’s C-17 cargo plane; moved to end Boeing’s role in modernizing electronics on the C-130 cargo plane; and now awarded a $3.8 billion contract to its rival… [Army and Nay relationships are good, but] there is something uniquely impaired about the company’s relationship with the Air Force, and Boeing managers need to figure out what that is. It’s not as though Boeing has failed to deliver for the Air Force.
…it’s pretty obvious why the company needs to get back on track with the Air Force. But the Air Force needs to get back on track with Boeing too, because there just aren’t that many companies left that can build the kind of planes it will require in the future.”
Oct 1/09: Award to Northrop Grumman announced via a terse Pentagon statement that “Northrop Grumman Technical Services of Herndon, VA was awarded a $3.8 billion contract to provide contractor logistics services [CLS] in support of Air Mobility Command assets. At this time, $4,000,000 has been obligated.” The 727 ACSG/PKA at Tinker Air Force Base in Oklahoma manages the new KC-10/KDC-10 CLS contract (FA8106-10-D-0001).
Boeing and its subsidiaries have been the prime contractors for all previous 10-year KC-10/KDC-10 logistics support contracts, and its subsidiary McDonnell Douglas had manufactured the planes. Support was performed at the facility in San Antonio, TX, which also supports the USAF’s KC-135s and C-17s. About 200 of Boeing’s 1,700 local employees currently support the KC/KDC-10 in San Antonio, and their future is is uncertain. The company will have a meeting with USAF officials to determine why the Air Force made the decision to award the contract to Northrop Grumman, and the firm must then decide whether or not to protest the award. Northrop Grumman | Reuters | San Antonio Business Journal | St. Louis Post-Dispatch.
Oct 1/09: Boeing announces that a Dutch KDC-10 modified with Fokker Services and Boeing’s Cockpit Upgrade Program (CUP) has completed a certification flight-test program that began in July 2008. The final 5-hour test flight was conducted from Eindhoven Air Base on Aug 26/09.
The CUP program now moves into the certification process with the Netherlands’ aviation certification authority, followed by customer acceptance early in 2010, and Operational Test and Evaluation (OTE) with a RNLAF crew. If everything checks out, the RNLAF will ship the 1st of 2 more KDC-10s for the CUP modification in 2010.
In July 2009, Boeing submitted a proposal in July for the U.S. Air Force’s own KC-10 Communication Navigation Surveillance/ Air Traffic Management (CNS/ATM) upgrade program. That contract is expected to be awarded in May 2010, and though it is a modernization, it is separate from the maintenance contract.
- Boeing – KC-10 Extender
- USAF – KC-10 Extender
- MvD/ RNLAF – McDonnel Douglas KDC-10 / DC-10 [in Dutch]
- Northrop Grumman – KC-10 Contractor Logistics Support
- Lexington Institute (Oct 2/09) – Boeing Defeat Points To Problems In Air Force Relationship
- DID – Home stretch: Final 2008 Option for KC-10/KDC-10 Support. Covers the final contracts under the previous arrangement with Boeing, and notes the upcoming competition.